tl;dr
Immunefi's quarterly report on crypto sector losses reveals that $412 million was lost to hacks and frauds in Q3 2024. Decentralized Finance (DeFi) is targeted more frequently, but Centralized Finance (CeFi) experienced the largest losses, emphasizing the importance of self-custody. Despite the subs...
Immunefi's Q3 2024 report reveals $412 million losses in the crypto sector, with DeFi targeted more but CeFi experiencing larger losses, emphasizing the importance of self-custody. Despite $413 million losses, ImmuneFi's report shows improvement in crypto security with 40% decrease in losses from the previous year and a significant drop in frauds. DeFi losses down by 80% while CeFi losses increased by 66%, emphasizing the vulnerability of infrastructure and the importance of self-custody in the crypto sector.
Immunefi's quarterly report on crypto sector losses reveals that $412 million was lost to hacks and frauds in Q3 2024. Decentralized Finance (DeFi) is targeted more frequently, but Centralized Finance (CeFi) experienced the largest losses, emphasizing the importance of self-custody. Despite the substantial loss figure, the overall security situation is improving, with a nearly 40% decrease in losses compared to the previous year. While DeFi losses decreased by almost 80%, CeFi losses increased by 66%, predominantly due to major exchange hacks. Immunefi emphasizes the criticality of self-custody in safeguarding crypto assets.
Immunefi, the bug bounty platform for blockchain, released a comprehensive report on crypto losses in Q3 2024. The report claims that just under $413 million was lost from the Web3 ecosystem, on its surface a staggering amount. However, ImmuneFi also estimates that nearly $90 billion is locked in the entire industry, making these losses surprisingly light. Indeed, the security situation is actually improving by wide margins. According to a previous report, Q2 saw $572 million in losses, and Q3 last year saw over $685 million. In one year, that’s almost a 40% decrease. More than 99% of these losses were due to outright hacks, and frauds are diminishing greatly.
In other words, it’s sheer chance that Q3 losses are this high. Frauds are down over 86% in a year, and it’s clear that the crypto security situation is improving in many respects. For example, more than half of losses by chain came from Ethereum and BNB, and several of last year’s biggest losers are no longer represented at all.
“We’re seeing a higher number of incidents targeting DeFi, while CeFi experiences fewer incidents but often with more severe consequences, with hundreds of millions in stolen funds in a single exploit. In CeFi, the biggest infrastructural issue is private key management, which is essential to maintaining the self-custody of crypto assets but is not typically subject to security audits”, Immunefi’s CEO Mitchell Amador, said. Amador cut right to the heart of the matter. DeFi losses are down nearly 80%, but CeFi losses increased 66%. A few massive exchange hacks represent the lion’s share of successful thefts, even though more DeFi hacks were attempted. This goes in line with Immunefi’s previous statements that infrastructure vulnerabilities are the real weak point for crypto projects. For these reasons, self-custody is more important than ever.
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